Keeping Your Bitcoins Safe: Hot Wallets Vs Cold Wallets

March 8, 2018

There are basically two general types of wallets to keep your bitcoins, and 
other cryptocurrencies, safe. There are cold wallets and hot wallets. In this 
article, you'll find out the pros and cons of each type of wallet so you can 
make an informed decision when choosing which wallet to go for.

 

Hot Wallets

 

Hot wallets are called hot because they are connected to the Internet which 
generally means that it is easier for hackers to hack into and steal your valuable 
coins from you. Examples of hot wallets include those free wallets at your 
favorite bitcoin exchange website like Coinbase or Kraken, and mobile app 
wallets. 

 

Desktop wallets are another form of hot wallets especially if you install it on 
a system that is connected to the Internet. However, you do have control 
over your private keys, and you can encrypt your wallet to prevent hacking 
attempts. The only downside to desktop wallets is if your computer gets 
destroyed or stolen, then you can pretty much say goodbye to your 
bitcoins.

 

There have been many instances of theft in hot wallets. Some hackers 
have even managed to steal millions of dollars' worth of bitcoins! Hot 
wallets are great for storing small amounts and transacting on the fly. But if 
you've got quite a sizeable number of bitcoins, then it is best to move these 
to offline storage or cold wallets. 

 

 

 

 

Cold Wallets

 

Cold wallets are the preferred storage method of people with a significant 
amount of bitcoins. Examples of cold wallet include paper wallets and 
hardware wallets. Paper wallets may sound a bit funny at first because 
we're talking about storing digital currencies here, but it is precisely why it is 
one of the best types of wallet for long-term storage! With paper wallets, 
there is zero chance of anyone hacking anything on paper. The downside 
is it can be stolen, or it can get burned, or destroyed. To keep your paper 
wallet safe, consider putting it in a safe environment like a safety deposit 
box.

 

The second type of cold wallet is the hardware wallet. It is a physical offline 
device that is pretty much like a glorified USB that can be plugged into your 
computer when you need to make a transaction.  There are three main 
brands that are very popular among crypto owners. These are Trezor, 
Ledger Nano, and KeepKey. All three will cost you some money but will 
definitely help keep your virtual treasure chest safe. 

 

We have partnered with DoLouii to offer Goldium customers a quick and secure way to transact in bitcoins. Transactions can be done at any of our branches. Contact Lou at 647-866-6969 for more information or you contact someone at Goldium and we will point you in the right direction.

 

 

 

Disclaimer: The information presented here is for general informational purposes only. While we try to keep the information up-to-date and correct , there are no representations or warranties, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to the information, products, services, or related graphics contained in these blog posts for any purpose. Any use of this information is at your own risk.

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